If you ask 10 different people what they pay for car insurance, you’ll probably get 10 different answers. The question is why. Car insurance companies use algorithms and formulas to calculate what each policyholder will pay. There’s no flat rate everyone will pay, the rate is determined by the variables and
factors each driver has. Here are a few surprising factors that can spike your rates.
- Renter’s delight– Although insurers haven’t stated justification yet, people who rent a home typically
pay 6% more for car insurance than homeowners. Not all insurance providers do this, but a fair amount do.
- Too Cool for School– Possibly the most controversial factor, college educated drivers typically pay less than drivers without degrees. There have been some studies done on this factor, and they tend to oppose each other. One study suggests the more education a driver has, the less the insurer will pay in claims. However, another study suggests that those higher educated drivers tend to pay for small accidents out of pocket, which skews the numbers of the first study.
- Sketchy Neighbors– People who live in areas with higher crime rates will pay more for insurance. This is because the insurers figure that cars parked in sketchy neighborhoods have a higher chance of getting robbed or stolen. A few providers will even ask where the car will be primarily parked (street, driveway, or garage).
- Single and ready to mingle– According to a study done in 2004, married people are safer drivers. Insurers use that study to make single people pay more for car insurance. This rate increase typically applies to singles, divorcees, and even widows.
So if you want to save on car insurance, buy a house, go to college, move to the suburbs, and get married. Or you can call All American Insurance and let them find the best rate for you.